Brothers in corruption: Maldives and Burma

Burma’s relationship with North Korea has proved a sensational story of how autocrats share their ill-gotten gains and maniacal plans. But as the Maldives comes to grips with its own autocratic past, the scale of the former dictator’s malpractice has astonished observers: what a UK-based accounting firm found when probing the rule of Maumoon Abdul Gayoom and his family was a corrupt nexus that went well beyond the white beaches of the Indian Ocean nation, and which implicates the Burmese junta in a massive international scam.

The accountants, Grant Thornton, discovered that the former president of the tiny island nation was receiving a large allocation of cut-price oil from the Muslim-dominated Organization of the Petroleum Exporting Countries (OPEC) cartel, channelled through a Singaporean branch of the Maldivian State Trading Organisation (STO). The scale of the $US800 million fraud was noted by a Maldivian government official to be not significantly different to the GDP of that country, $US1.4 billion.

Ships carrying the oil from Singapore had records demonstrating that they embarked but never arrived in the Indian Ocean archipelago. Instead the vessels were selling on the bounty to international buyers on the black market, including Burma’s military junta.

Among the companies who did business with the Maldivians was Kanbawza Bank, owned by Aung Ko Win, who is close to Burmese vice-general Maung Aye. Perhaps the business was being done on behalf of Maung Aye.

Kanbawza is no stranger to controversy, and was recently at the centre of a row over Burma’s flag carrier, MAI. The bank was started in Shan state by the then-unknown and apparently ‘asset-less’ teacher, Aung Ko Win, who happened to meet and befriend Maung Aye. From mysterious profits made in the Shan hills – once the world’s largest source of opium – the bank has grown to become one of the biggest and most important financial institutions in Burma.

The Maldives is given a special, cheap allocation of oil by OPEC because of the cartel’s preferential treatment for 100 percent Sunni Muslim nations, so the tiny island state under Gayoom would assume a far larger allocation of oil than the residents of the country needed.

Gayoom and his half brother, Abdullah Yameen, set up a joint venture called Mocom Trading Pvt. Ltd., incorporated in 2004, to sell this allocation from Singapore. It was a joint venture between Mocom Corporation Sdn Bhd, a Malaysian company, and the Maldivian State Trading Organisation (Singapore), of whom Yameen is also the chairman.

“STO Singapore appear to have purchased fuel from Shell Eastern, the Singapore Petroleum Company and Petronas, and then sold it to STO, its parent company, or to third parties,” the Grant Thornton audit says, indicating also that Mocom was set up specifically to sell diesel to Burma.

“STO Singapore wished to sell oil to Myanmar, however as Mocom had the contract, it was agreed that STO Singapore and Mocom would form a joint venture, known as Mocom Trading Pte Ltd, incorporated in Singapore.”

Indeed Mocom would have been enlisted specifically, being one of only four foreign companies, along with Korea’s Daewoo and Hyundai, and Malaysia’s Petronas, to supply Burma with petroleum products.

The allegations also allege that books were “fudged” so that proceeds from the sales could be illegally siphoned off.

“STO Singapore and Mocom Singapore each generated sales invoices addressed to Myanmar for each delivery showing the quantity of barrels delivered and the unit price. The content of the invoices are alike, except for the price per barrel,” the Grant Thornton report states.

It adds however that from April 2004, the oil shipments to Burma “appear to have been discharged in the Maldives instead of Yangon, as per the sales invoices” and that “shipments invoiced to Myanmar may have been delivered to a third party”.

Thus not only were the Burmese buying diesel that had been earmarked specifically for the Maldives by OPEC, but they appear to have been facilitating, through fraudulent paper work, its sale to other countries, thus allowing the Maldivians to cover their tracks.

The Gayoom family is said to be well connected in Burma and allegedly holds strong links with Lo Hsing Han and his family, who own the Asia World Group. The powerful conglomerate takes on many lucrative construction contracts, including the running of public infrastructure. Moreover the company was allegedly built on the back of drug profits, with the US government’s Office of Foreign Assets Control (OFAC) terming Han “the godfather of heroin” and regional expert Bertil Lintner claiming “there is simply no other way” Asia World could have risen to its heights.

Indeed the Grant Thornton report indicates that several sanctions listed companies owned by Lo Hsing Han’s son and his Singaporean daughter in law, Cecilia Ng, were also doing business with the Maldivian STO. These companies include Golden Aaron and S H NG Trading Pte Ltd which, invoices show, were only actively trading with the STO in 2002. The audit says that from 2001 to 2002, “revenue increased dramatically” to $US78.8 million, and then began to fall after 2006.

Singaporean press in 2004 had indeed marvelled at how Golden Aaron, a mysteriously diverse and small company with a so-called specialisation in the import-export industry, could win large oil contracts in Burma.

The main vehicle for the scam, the Maldives STO, is 92.29 percent owned by the Maldives state. Its Singapore branch was formed in 1997 and is primarily used for the purchase of petroleum products in the City State from companies such as Petronas and Shell Eastern, but with the OPEC discount.

Its managing director from 1993 to 2008 was a man named Mohamed Maniku, of whom the audit reports: “We have reviewed various purchase invoices regarding [his] visits to Malaysia and Myanmar from the STO Singapore office, which clearly indicates that Mr Maniku was acutely involved in the STO Singapore oil strategy involving Myanmar and other third parties.” Indeed a trip to Burma was recorded in 1998, before which, on 30 April of that year, the Business Times reported him “seeking profitable international ventures”. This referred to an alleged lubricant deal with the Malaysia-based Stephen Hansford company.

This preceded a trip to the country he made roughly two weeks later with Yameen. According to the New Light of Myanmar, they stayed for three days between 10 and 13 May, meeting with the Myanmar Import Export services and agreeing to purchase “parboiled rice”.

The Gayoom regime, which had ruled the Maldives since 1978, was ousted in a 2008 election won by former political prisoner, Mohamed Nasheed. Gayoom’s tenure however left stains on the picturesque Indian Ocean archipelago that are only now being slowly faced.

Indeed as the Maldivian President’s Member on the Judicial Services Commission (JSC), Aishath Velezinee, told the Minivan News recently, “Leaders of the former administration are continuing with criminal activities they have allegedly been carrying out for a long, long time”.

He said that the raft of corruption allegations remained just allegations “because they have never come up before a court of law in all this time. There is widespread public perception that certain members of parliament are behind all the serious organised crime going on in this country. This includes serious drug issues, gang violence, stabbings. It is a much discussed issue, but it has never come up in the courts. I can see now that perhaps it may be true – otherwise why prevent the formation of an independent judiciary? I don’t think they would have confidence that they would get away free”.

Indian investigative journalist Sumon K Chakrabarti, who is writing a book about the Gayoom years, believes that drugs are a “huge issue” in the Maldives and that “a generation was lost to heroin.”

The “eruption” of heroin there, as Gary Lewis of the UN Office of Drugs and Crime (UNODC) puts it, seemingly occurred in two stages: Maldivian government sources estimate that the drug first became available in the Maldives in the 1990s, largely seen to be of Afghan or Pakistani origin. But Lewis states that ‘China White heroin’, the vast majority of which is produced in Burma and which a senior Maldivian journalist says is now “common” on the streets of the capital, Male, first appeared around 2003.

The date follows on the heels of the marriage between companies associated with Lo Hsing Han, SH Trading and Golden Aaron, and the Maldivian STO, as well as involvement from Kanbawza Bank, which is seen by economic commentators as an expert in the laundering business. Perhaps more pertinently, however, it’s also when “revenue increased dramatically”, as the audit notes.

The chairman of the STO, Yameen, has also been explicitly accused by the Maldivian parliament of involvement in the heroin trade.

Maldivian police refused to talk when contacted by DVB. Government officials, who requested anonymity, suggested they police be too scared to talk to the press, but noted that a large proportion of the country’s youths were heroin addicts.

In 2002 all the Burmese companies involved, from the military-run UMECH to Kanbawza Bank and the two Asia World-linked businesses, paid commission to a man of Burmese origin named Myint Lwin Oo – in Malaysia, however, he is known as Kamal Bin Rashid, as is one of the directors of Mocom. The money was paid to a United Overseas Bank account in his name in Singapore.

“It remains very unclear to us what STO Singapore’s role in the process had been, given that Mocom already had the contract to sell oil to Myanmar,” said the Grant Thornton audit. “It would have been more profitable for Mocom to set up a trading arm in Singapore and purchase the fuel itself, benefiting from all related profits.”

It continues that the post-2005 decrease in the STO’s revenue may have been down to a change in the organisation’s structure after it became a joint venture, but added that “It is unclear why STO Singapore paid commission to Mr Rashid [Myint Lwin Oo] and on what basis.”

So why did the Burmese companies, those associated with the narcotics industry, stop paying? Did payments go the other way as part of a “profitable international venture” of the STO’s then-director Maniku, and former chairman, Yameen?

The details of the Gayoom family’s legacy on the tiny island nation are unravelling, and more reports are expected. At present they ask more questions than they answer, but the unrivalled power of one autocrat is, it seems, here served by a close relationship with others, namely the Burmese, whose shared corruptions were worth hundreds of millions and which will take generations to fully recover.

its really a very serious problem , as i live in Maldives for long time, what i remember is abt year 2005 , a group of young maldivian snorkeling in the reef found 1.5 tons of heroin , and that reef and that island is far away from the inhabited islands, its packed very professionally that they can store under the were nobody goes. what i can feel here is that heroin shipment not only for sale in Maldives but as a transit cargo which may go to European countries. but unfortunately its busted so that Yaameen could not send money for the loss he guaranteed,and there comes the end of Mocom.
Its 100% guarantee that no Maldivian can pay for 1.5 tons pure heroin,but the dictator and Yaameeen. Now its very clear how Mocom stopped its business.

How did Mr Gasim Ibrahim earn the nickname “Burma Gasim”? Gasim was said to have been raised at Maumoon’s wife Nasreena’s family home? Did he also gain his fortune by being part of this racket with Maumoon and Yameen?

tyrant Gayoom has give many “loans” to his cronnies with no fixed repayment and interest. nobody has paid these “laons”. i call mr. gayoom case to tried in international court as local court judges are under” benfitted influences”

We do not need the full report to declare he ( gayyoom ) should be locked behind bars. Its not a question its something thats too late to happen… He took all our money and we are struggling today to meet our ends … International community, please .. Please help poor maldivians to errest this tug gayyoom.

the current government has failed us.. showing us false hopes and telling us lies about the proofs that they dont have about gayyoom..
nasheed has proved himself that he is no better than the ex-president maumoon.. its just a matter of time.

The problem is that the tyrant Gayoom is not even appreciating the fact that Mr. Nasheed has been very lenient with him and his friends despite many atrocities and corruption done by the Gayoom government. Mr. Nasheed should be a little strict with Gayoom and send him to an international court, only where we can get true justice, as the justice system here is still under the control of the former dictator.

President Nasheed is handicaped because of judges and cronies remaining in power in Civil Srvices. Gayyom Ilyas, Qasim, Yamin must be tried in international court. Mr. Nasshed has asked several times to look into this as these are wealth stolen from poor people of maldives.

Well Yameen claims he is clean. It seems he bought a land in the most prrime location in Male’ built an apartment block there, built a city hotel at his wife’s land with money he earned as a civil servant. He never had shares in Jabir’s business and no association with Sun Travel group as well. He has enough money to give few hundred thousands as short term loans to people like Thasmeen. He is not involved in any business. What a clean man. Yameen please tell us how to do all the above despite being in civil service only.

As a former addict I feel it my responsibility to come out and explain the issue. Heroine business was started in early 90s by locals from India and Sri Lanka. Maybe the heroine they brought here was produced in Afganistan or Pakistan. Many of those who became their Maldivian agents and used heroine are in the leadership and grass root of President Nasheeds MDP. You can’t find any political official working in the Presidents office who doesn’t smoke ganja. The press secretary Zuhair was among the 3 who were first caught in 1977 with cannabis and Maldivian drug law was passed to punish those 3. So this is the history of Maldives and the opposition. At the proper time we will prove that President Nasheed is a ganja smoker and many are ready to testify under oath.

yaa yaaa blaaa blaaa etc
Maumoon is out on the deck so these kind of allegation will come out. Everybody knows he is corrupted dictator with a brilliant mouth. We are ready to forget everything if he is willing to stay at home.
About yameen we do not need any allegations. Just look at him.

What a joke.Another attempt to slander former president Gayoom by MDP. IF there were any proof wouldn’t the government covet the prize and go for Gayoom’s head? Come on guys don’t try to cover-up the current dictatorship’s authoritarian rule and the mega corruption that prevail by going back to the same old trick of coming up with so-called dreamed-up concoctions.

Maumoon and Yamin may have benefited from the illegal oil trade and should be brought to justice. However, the current regime cannot pride itself on being clean either. It has entered into shoddy deals in leasing and selling off national assets.GMR which took over the management and operation of Male’ international airport last year, is asking some of its customers to make payments in US dollars which violates the monetary rules of the country. Yet, the government is unable to do anything about it. The hastiness and secrecy with which this deal was pushed through makes it a case for investigation into potential irregularities.

This artical is very very interesting and i beleive this is true. So i call hardly to our government to arrest the dictator and his brother immediately as well as people whom help him to do this dirty things. We want justice immediately. Mojey

“A man is innocent until proven guilty.”
What is the proof that Maumoon and Yameen, the two brothers had involved in illicit trade? In today’s free world any one can write anything without any basis. This article, I presume is such a baseless article to gain some favour from the government of President Nasheed.
I am aware that Mr. President had also formulated an investigation team soon as he proclaimed country’s leadership but until now we have not even heard any news on their investigation. On the other hand Maumoon and Yameen both had gained financial lump sums from those who has accused both these high officials of tyranny.
I strongly call upon President Nasheed that if he want a re-election these allegations has to be investigated and the accuses shall be brought to the justice and case shall be known to Maldivians.
It’s also true that supporters of President Nasheed are losing his credibility by such baseless allegations.
I also would like to state that Nasheeds’top party cronies also doing the same bloody tactics that Maumoon and his cronies did during their prime time in power by removing opposition people from their posts and transferring the opposition groups away from their family.
I wonder when do these guys learn from past?
My humble request to President Nasheed is not to encourage his topgears to conduct such inhuman acts on poor Maldivians. Play the game fairly.

We only see the real dictator now. Mr. Nasheed government is not gonna obey the commands from Anti corruption commission also from the orders of the courts. So who is the real dictator. I have voted to Nasheed in the last election to out Mr. Gayyoom from the government. But now only I realize that this Anni ( Ganjabo ) is the real culprit. This is the Mugabe in Maldives.

President Nasheed please don’t fail us on delivering justice. The traitors are out there with the illegal money and they are destroying the fragile democracy at its infancy.
We want justice as soon as possible.

You’re not Fazeen Shakir. You must be either Yameen or Boh’ Mundu (the former spokes person of dic. Gayyoom).

Fazeen Shakir was brilliant school mate who’ve been with me. He somehow got trapped in your so-called-leaders’ (Yameen & Gayyoom’s) drug shipments. And that’s how he got to be an addict. Fazeen lost his education and his life as a matter of fact.

That’s how you guys wanted to prevail in power for decades – 30 years. Yes, you guys destroyed the youth (the future) of the country to stay in power. You shameless and cowardice people trying to comment in the name of the very poor citizens whom you’ve completely destroyed.

Also one, more fact, Fazeen Shakir can never write that well phrased English and are not so familiar and fond of internet based news articles.

Just go to M.Sea Wind and meet Fazeen Shakir. Ask about who he would blame on loosing his education and life. Gayyoom would be the answer.

mode12 lost control because he wanted to hide the secrecy. somehow mode12 has lost tollerence when fazeen explained everything clearly. its true current regime hold records of using, selling and producing illicit drug related items.

its very clear to public who is the crony and who is not….most maldivians are aware that yameen and his dictator brother is inolved in drug trafickking ,murders,stabbing,illegle jail sentence…we want punish yaameen and maumoon